TOPEKA — The Kansas House committee’s hearing on a bill creating a “regulatory relief” division in the executive branch of state government began running off the rails Monday as soon as a legislative staff member confirmed the office of Attorney General Kris Kobach would be granted power to suspend laws, regulations and rules for chosen businesses.
Charles Reimer, who serves the House and Senate commerce committees as an assistant revisor of statutes, offered nuts and bolts of House Bill 2821. He said the new division on regulatory overreach would be controlled by Kobach, a Republican. It would be accompanied by an 11-member advisory council appointed, if current political trends held, by Republicans. The panel would vote on which state laws, rules or regulations could be suspended for up to 24 months to benefit specific innovative companies vowing to deliver value to consumers.
The new division would require hiring of more lawyers in the attorney general’s office and the selection of a director of regulatory relief. Under the House version of the bill, a state regulatory agency could argue against approval of a company’s application to be part of the so-called “sandbox” program for cutting-edge businesses. Applications from companies eager to shed the yoke of state government mandate would be exempt from the Kansas Open Records Act. Deliberations of the advisory panel would be exempt from the Kansas Open Meetings Act.
“In a nutshell,” Reimer said, “it provides an opportunity for businesses to have certain regulations and statutes waived so they can provide what the bill describes as an ‘innovative offering’ to consumers of Kansas for a limited time.”
He said the attorney general’s new division also would strive to identify regulations, rules or laws that unnecessarily hampered business growth and were ripe for repeal by legislators and the governor.
Kobach didn’t testify for or against the bill, but it was endorsed by the Kansas Chamber, Americans for Prosperity and other pro-business lobbying organizations. A central advocate for the concept has been the American Legislative Exchange Council, a libertarian political advocacy organization.
Questions about ramifications of the bill were raised by the Kansas Board of Healing Arts due to concern about how health licensing could be weakened and patient care imperiled. There was opposition from the Kansas Sierra Club, which argued one consequence of the bill could be widespread disregard for state environmental regulations related to wildlife, water and soil resources.
Rep. Dan Osman, an attorney and Overland Park Democrat, said the legislative branch of Kansas government was assigned the task of adopting and repealing laws, rules and regulations. The House bill would introduce a structure into the state’s executive branch in which the attorney general held sway over when, where and how long established state laws, rules or regulations would be applied to certain companies, Osman said.
“I don’t consider it to be enforcement,” he said. “I think that that would be more akin to determining which laws exist or don’t exist. Is that a constitutional issue?”
Exploiting loopholes
Champions of the bill recommended the House Commerce, Labor and Economic Development Committee amend it to extend the suspension of regulations, laws or rules for up to three years and eliminate the $250 application fee for a company seeking an exemption from routine oversight by bureaucrats.
It was suggested eligibility be broadened to more or less any businesses in Kansas — not just innovative newcomers — eager for relief from boundaries set by generations of state lawmakers.
“Now you’re touching every business, every regulation, every law that we have in the state,” said Rep. Tom Kessler, a Wichita Republican and member of the House committee. “Businesses are probably going to exploit regulation loopholes to gain a competitive advantage over existing businesses. How can we keep that from happening?”
Rep. Michael Dodson, R-Manhattan, said the legislation created “a little bit of gray area” as to whether companies receiving a waiver from the attorney general’s office could be found liable for civil damages or criminal penalties. There were assurances companies qualifying for participation in the business innovation sandbox couldn’t avoid accountability for misdeeds, but that didn’t end questions and comments along that line of thought.
“This bill does not give anybody immunity,” said Rep. Sean Tarwater, a Stilwell Republican and chairman of the House committee. “If there’s negligence, they’re going to pay.”
